Summary

When the Omnibus Budget Reconciliation Act of 1990 was passed, overall savings from the multiyear deficit reduction agreement were pegged at about $500 billion. However, the deficit has not dropped to the levels expected at that time. For example, the Congressional Budget Office (CBO) projections in late 1990 showed that the fiscal year 1993 deficit would be $170 billion, but the actual deficit was $255 billion. This report focuses on issues surrounding one component of the deficit reduction agreement--$98.8 billion in mandatory spending program reductions and increases in user fee collections. GAO (1) examines the reasons for shortfalls between deficits projected at the time of the act and actual deficits experienced since then, (2) ascertains whether actual results of the 38 individual act provisions GAO examined were achieved, and (3) describes CBO and agency roles and responsibilities in the act's reconciliation process as they affected the act's contribution to deficit reduction.

GAO found that: (1) deficits have been greater than projected primarily because of worse than anticipated economic conditions; (2) slower than expected economic growth between fiscal years 1991 and 1993 caused federal revenues to decline and spending to increase more than anticipated; (3) OBRA policies to reduce mandatory program spending and increase user fee collections were effective in reducing the deficit below what it could have been; (4) CBO supplied Congress with accurate estimates and the executive branch agencies implemented OBRA provisions promptly; (5) agency officials believe that while 32 of 38 OBRA 1990 provisions were effective in reducing the deficit, the remaining six provisions did not affect the deficit; (6) agencies could not precisely determine the impact of individual reconciliation provisions; (7) although deficits did not drop to the levels expected when OBRA 1990 was enacted, Congress had the authority to enact changes in individual mandatory programs to reduce the deficit at any time; and (8) there is no procedure that automatically compares the deficit with projected reductions.